|
||||||
| General Discussion Please read our Forum Rules before posting Feel free to talk about anything and everything about money. |
 |
|
|
LinkBack | Thread Tools |
12-03-2008, 03:51 PM
|
|||
|
|||
Jim - I can't thank you enough for bringing up all these points for me today...I need to reread it and weigh everything.
Just to be more specific...when we get married: My salary: $60,000 Fiance's : $42,000 Gov't loans: $65,000 at 6.8% Private loans:$65,000 at 8.2% It is estimated that he will be paying $800-$900 a month for 30 years. Cars are paid off. No credit card debt. Wedding is paid for in cash. No other "big ticket" bills. I guess when you mentioned all of the possible goals...I just want to do what is really smart and live within our means. The current plan is to stay with my dad for two years and then buy a house. If we max out our ROTH and save at the same time...I will have about $65,000 saved... Oh...and the forever home is $300,000...not $400,000...which helps a little.  
|
|
12-03-2008, 05:43 PM
|
||||
|
||||
|
Quote:
1a) 102k gross income- calculate take home using a paycheck calculator PaycheckCity.com | Paycheck Calculator 1b) establish a plan to save 15% for retirement (16k per year) and put dollar amount in monthly budget 1c) establish a plan to set aside 5% for short term financial needs (5k per year) and put dollar amount in monthly budget. -- 2a) create a budget based on house with 80-10-10, and $800/month student loan payments- make sure the 80% payment number, the 10% payment number are on different lines 2b) outline how much is saved now 2c) outline how much is saved at end of each year (2008, 2009, 2010 and so on) 2d) add a line item to budget to "save for house"- do not use the 5% number above as earmarked for house 2e) calculate total savings- sum house savings (2d) and short term savings (adding 5% from 1c) into the 2d total -- 3a) Create an ammortization table of 3 scenarios- 80% payment plan, 10% payment plan and a sheet which combines 80 and 10 so you can see when you will own 20% (this would be soonest point to refinance out of two loans into one loan) 3b) create an ammortization table for the student loan payments (each loan seperate table) 3c) if consolidation is an option create that ammortization table seperately -- 4) look at budget vs income. Your budget should have the savings (15% for retirement) accounted for already. It should have the 80-10-10 accounted for and you should see each student loan payment as it's own line item. Calculate FREE CASH FLOW- this is the amount your income allows you to "save" or "apply extra principal" to the various loans. -- 5) Take the free cash flow to one ammortization table and plug it into the "extra payments" column. See when the payment goes to zero. At the next month go to another loan and plug the amount of old loan plus paydown and see when that zeros out. Carry this through all loans. **my take is sooner or later the extra $100 or $500 I squeeze out of something no longer gives me the result I want- for example if $100 over 2 years results in a loan being paid off 2 months sooner than the "original date", I tend to want that $2400 for something else (2 months not worth it). You will probably see this on 30 year loans if payment is applied at end ($100 month now is worth more than $500/month in 20 years as far as early payoff). You need to run the numbers to know what makes sense. I am engineer, so flow chart I create would be loan 1 (payoff date month A /year X)--> apply to loan 2 on A+1/X and see when paid off. loan 2 (payoff month B/year Y)--> apply to loan 3 on B+1/Y and see when paid off. loan 1 and loan 2 and loan 3 are student loans you would need to do another run on the consolidated loans and see which gives earliest payoff date (should be with loans seperate, but if interest rate on consolidation is low, maybe not). If you are good at math and follow this, forgive my gory detail If you despise math but can run a spread sheet, I could probably set up the spreadsheet (I have done this for our debts already). You could re-read the posts 30 times and it might get foggier each time. If you spend 8 hours with a spreadsheet you will have a black and white timeline. Money decisions are time bound (to me)- it is about how much money is available when or what debt is paid off when. Make sure you look at this from 3 sides: 1) what gives the initial budget the most "free cash flow" 2) what gives you freedom from all debt except mortgage the soonest? 3) what pays the least amount of interest to banks over the life of the plan?
__________________
Last edited by jIM_Ohio : 12-03-2008 at 05:53 PM.
|
|
12-03-2008, 05:58 PM
|
||||
|
||||
|
Holy cow jim! You got some mad skills! I have a lot to learn!
|
|
12-03-2008, 06:31 PM
|
|||
|
|||
|
I know...isn't he amazing?
|
|
12-07-2008, 05:17 PM
|
||||
|
||||
|
jIM, thanks! Will that still work in the current contraction/recession/depression? (sorry this reply is so late - I left it open on a computer in the back room and just now noticed that I had not sent it, sigh!)
This is in regards to the 80/20% mortgage.
__________________
IYQYQR
|
|
12-07-2008, 06:02 PM
|
|||
|
|||
|
It's really an 80/10/10 mortgage - right? Because I would be putting 10% down...
...isn't an 80/20 mortgage a "no money down" mortgage? Maybe I am wrong?
|
|
12-08-2008, 06:03 AM
|
||||
|
||||
|
80-20 would be 20% down, 80% financed
80-10-10 would be 10% down, 80% financed first, 10% financed second 80-10-10 would be tough to do in this credit environment, but more than likely can be done with a high credit score and motivated lendor.
__________________
|
|
12-08-2008, 09:43 AM
|
||||
|
||||
|
Quote:
An 80/20 loan is 2 loans, zero down. They don't exist anymore.
|
|
| Currently Active Users Viewing This Thread: 1 (0 members and 1 guests) | |
| Thread Tools | |
|
|
